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Quantchabot has detected a promising Long Risk Reversal trade opportunity for PARTY CITY HOLDCO INC (PRTY) for the 15-Jan-2021 expiration period. You can analyze the opportunity in depth over at the Quantcha Options Search Engine.
PRTY was recently trading at $4.33 and has an implied volatility of 121.89% for this period. Based on an analysis of the options available for PRTY expiring on 15-Jan-2021, there is a 34.14% likelihood that the underlying will close within the analyzed range of $4.33-$6.99 at expiration. In this scenario, the average linear return for the trade would be 75.96%.
Big 13.95% Change: After closing the last trading session at $3.80, PARTY CITY HOLDCO INC opened today at $3.80 and has reached a high of $4.45.
Trade approach: A movement as big as 13.95% is a significantly bullish indicator, so this trade is designed to be profitable if PRTY maintains its current direction and does not revert back to pricing on the bearish side of $4.33 on 15-Jan-2021. If possible, the trade has been padded such that slight movement against the trade would still return a profit.
Upside potential: Using this bullish strategy, the trade would be profitable if PARTY CITY HOLDCO INC closes at or above $4.30 on 15-Jan-2021. Based on our risk-neutral analysis, there is a 50.60% likelihood of this return.
Downside risk: As with any options trade, there is a substantial downside risk where you may lose most or all of your investment.
To analyze this trade in depth, please visit the Quantcha Options Search Engine.